Pricing objectives or goals give direction to the whole pricing

Pricing

Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a...

 process. Determining what your objectives are is the first step in pricing. When deciding on pricing objectives you must consider: 1) the overall financial, marketing, and strategic objectives of the company; 2) the objectives of your product or brand; 3) consumer price elasticity

Price elasticity of demand

Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price...

 and price points; and 4) the resources you have available.

Some of the more common pricing objectives are:

• maximize long-run profit SEXC
• maximize short-run profit
• increase sales volume (quantity)
• increase monetary sales
• increase market share
  Market share
  Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
  
  
• obtain a target rate of return on investment
  Return on investment
  Return on investment is one way of considering profits in relation to capital invested. Return on assets , return on net assets , return on capital and return on invested capital are similar measures with variations on how “investment” is defined.Marketing not only influences net profits but also...
  
   (ROI)
• obtain a target rate of return on sales
• stabilize market or stabilize market price: an objective to stabilize price means that the marketing manager attempts to keep prices stable in the marketplace and to compete on non-price considerations. Stabilization of margin is basically a cost-plus approach in which the manager attempts to maintain the same margin regardless of changes in cost.
• company growth
• maintain price leadership
• desensitize customers to price
• discourage new entrants into the industry
• match competitors prices
• encourage the exit of marginal firms from the industry
• survival
• avoid government investigation or intervention
• obtain or maintain the loyalty and enthusiasm of distributors
  Distribution (business)
  Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
  
   and other sales personnel
• enhance the image of the firm, brand
  Brand
  The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
  
  , or product
  Product (business)
  In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
  
  
• be perceived as “fair” by customers and potential customers
• create interest and excitement about a product
• discourage competitors from cutting prices
• use price to make the product “visible"
• build store traffic
• help prepare for the sale of the business (harvesting)
• social, ethical, or ideological objectives
• get competitive advantage